Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 307

It’s time for SMSF accountants and advisers to be friends

From 1 July 2016, the Australian Financial Services (AFS) licensing regime applying to SMSF services provided by accountants changed such that they can no longer provide recommendations around establishing or winding up an interest in an SMSF unless they are appropriately licensed to do so.

For those holding licenses, a new “educational, experience and ethical standards” regime came into play from 1 January 2019, lifting the educational and experience requirements to be a licensed financial adviser.

Mainly for this reason, many accountants have chosen not to go down the licensing path and stick to what they do: accounting. Some – who had been setting up, running and winding up SMSFs for their clients for years with no input from licensed advisers - have been forced to significantly change their practices as a result.

At the same time, there were substantial changes to the superannuation laws in 2017 with the introduction of concepts such as Transfer Balance Caps (TBC), transitional CGT relief, and Total Superannuation Balances (TSB) as well as complexities around Exempt Current Pension Income (ECPI). These all have direct and substantial impact on SMSF trustees and members.

Never has it been more important for a collaborative approach between accountants and advisers on SMSF advice and services. And yet, in my experience as both an adviser to SMSFs and more recently as a technical SMSF specialist working with accountants, there is still push back between the two professions in some pockets of the industry.

(Big, fat disclaimer here: #notallaccountants #notalladvisers)

Friction between professionals

Just as the builder and the architect mix like oil and water, so too do the accountant and the adviser often clash. The accountant seeks the best tax outcome for their clients within the framework of the relevant laws. The adviser does too, whilst applying sensible investment outcomes and seeking to ensure solutions remain workable, understandable and affordable.

The goals of each profession are intersecting and certainly both parties are working for the common good of the client’s best interests. Why can’t they get along?

The problem is that the lines between the two functions have blurred. The regulatory system is not perfect and advisers are stepping into areas that were traditionally the domain of accountants.

We have moved into an era where different specialists either have to work together hand-in-glove, or upskill and deliberately cross over into each other’s territory.

Consider the introduction of the $1.6 million transfer balance cap 

Most retirees with substantial superannuation savings needed advice and assistance to prepare for the new rules and avoid penalties, and SMSF trustees in particular. Who do they turn to for this assistance?

This table summarises some of the issues involved in getting a fund TBC-ready.

And on it goes. Both the accountant (or SMSF administrator) and the adviser play complementary and vital roles, but with grey areas and crossing-over of responsibilities. Where once it was quite separate, so it’s easy to see how friction can occur.

SMSF trustees are caught in the middle

It’s a new world for SMSF trustees, too. A trustee heading into retirement who prefers to be self-directed in investment selection may not have an adviser on an ongoing basis. In the past, they looked to their accountant for tax optimisation strategies. However, the regulatory system now prevents the accountant from advising on starting pensions and the trustee is forced to see an adviser and pay for a full Statement of Advice. It was previously done as part of the accounting service.

I’m not saying that the new licensing requirements are all bad. Several years ago, I had the heart-breaking experience of a new client, a widow, who with her deceased husband had built up their business. They had sold it in retirement and put the proceeds into an SMSF on the advice of their long-standing and well-meaning friend and accountant.

Their accountant recommended that 100% of the $2 million cash be invested conservatively into mortgage funds. Safe as houses, right? Then the husband died, comfortable with the knowledge that he had ensured his wife was set up for life. Then the GFC struck, and she's now on the age pension.

A collaborative approach

With the new licensing regime bedded down, it’s time to bury the hatchet and for both sides to recognise that each brings essential expertise, experience and professionalism to the table.

The SMSF trustee who aligns with an accountant (or SMSF service provider) and a licensed financial adviser that can take a collaborative approach will gain the most, well ahead of the trustee who relies on two people who work separately. As an SMSF adviser, fund accountants often worked against me not with me. It cost the trustees in missed deadlines and lost opportunities to optimise the fund’s tax position and it was (frustratingly) completely out of my control.

Equally, it's often the other way around, where an adviser has made recommendations that frustrate accountants because they completely ignore important tax planning which the accountant has carefully crafted with the client over many years.

Client education is essential

I am a strong believer in client education, and this is absolutely essential for SMSF trustees. They have serious legal responsibilities and obligations to uphold. Failure to meet these obligations can result in adverse consequences which may be extremely costly.

A well-educated trustee can recognise opportunities or threats as they arise through legislative developments. Education puts them in a position to take action when required. The possible removal of franking credit refunds case in point. The informed trustee will look for solutions in anticipation of a possible change, and talk to their accountant and adviser about the best strategies.

Both the fund accountant and adviser have an important role in providing this education to trustees.

The accountant’s intimate understanding of SMSF matters such as segregation (or not) of assets, ECPI, and inhouse assets (to name a few) is just as vital as the adviser’s focus on wealth creation and retirement income through contributions, pension structure and investments.

In the world of SMSFs, an aligned accountant and financial adviser can make a formidable, synergistic team. Specialists who can’t be friends can be just the opposite.

 

Alex Denham is a Senior SMSF Specialist at Heffron SMSF Advisers. This article is general information and does not consider the circumstances of any individual.

RELATED ARTICLES

Ructions in the SMSF market

banner

Most viewed in recent weeks

Australian house prices close in on world record

Sydney is set to become the world’s most expensive city for housing over the next 12 months, a new report shows. Our other major cities aren’t far behind unless there are major changes to improve housing affordability.

The case for the $3 million super tax

The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.

7 examples of how the new super tax will be calculated

You've no doubt heard about Division 296. These case studies show what people at various levels above the $3 million threshold might need to pay the ATO, with examples ranging from under $500 to more than $35,000.

The revolt against Baby Boomer wealth

The $3m super tax could be put down to the Government needing money and the wealthy being easy targets. It’s deeper than that though and this looks at the factors behind the policy and why more taxes on the wealthy are coming.

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

The super tax and the defined benefits scandal

Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.

Latest Updates

Planning

Will young Australians be better off than their parents?

For much of Australia’s history, each new generation has been better off than the last: better jobs and incomes as well as improved living standards. A new report assesses whether this time may be different.

Superannuation

The rubbery numbers behind super tax concessions

In selling the super tax, Labor has repeated Treasury claims of there being $50 billion in super tax concessions annually, mostly flowing to high-income earners. This figure is vastly overstated.

Investment strategies

A steady road to getting rich

The latest lists of Australia’s wealthiest individuals show that while overall wealth has continued to rise, gains by individuals haven't been uniform. Many might have been better off adopting a simpler investment strategy.

Economy

Would a corporate tax cut boost productivity in Australia?

As inflation eases, the Albanese government is switching its focus to lifting Australia’s sluggish productivity. Can corporate tax cuts reboot growth - or are we chasing a theory that doesn’t quite work here?

Are V-shaped market recoveries becoming more frequent?

April’s sharp rebound may feel familiar, but are V-shaped recoveries really more common in the post-COVID world? A look at market history suggests otherwise and hints that a common bias might be skewing perceptions.

Investment strategies

Asset allocation in a world of riskier developed markets

Old distinctions between developed and emerging market bonds no longer hold true. At a time where true diversification matters more than ever, this has big ramifications for the way that portfolios should be constructed.

Investment strategies

Top 5 investment reads

As the July school holiday break nears, here are some investment classics to put onto your reading list. The books offer lessons in investment strategy, financial disasters, and mergers and acquisitions.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.